Imagine this: You’re in your twenties, just starting your career. You fill out a form at work, naming your live-in significant other as the beneficiary of your retirement account. You start contributing to your retirement account, and it begins to grow. Fast-forward 28 years—you’ve long since ended that relationship, lived a full life, and then died. But you never changed that beneficiary designation, and now that ex-partner is entitled to your million-dollar retirement nest egg, leaving your family with nothing. This situation, if not addressed, could lead to significant financial loss for your loved ones.
Does this sound far-fetched? It’s not. This is precisely what happened in a high-profile lawsuit involving Margaret Losinger, her former boyfriend, Jeffrey Rolison, his estate, and Proctor and Gamble, the Company he worked for during those 28 years. The lawsuit, which gained national attention, serves as a cautionary tale about the importance of updating beneficiary designations.
Here’s a closer look at this shocking real-life story, the lessons we can learn, and how having a trusted advisor at every stage of life can protect you from making a million-dollar mistake like this or any other errors you might be overlooking.
What Happened?
In the 1980s, Jeffrey Rolison dated Margaret Sjostedt, and the two lived together. Rolison worked at a Procter & Gamble (P&G) plant, where he signed up for a profit-sharing and savings plan. In 1987, he listed Sjostedt as the sole beneficiary of his retirement account. The relationship ended two years later, and both moved on. Sjostedt eventually married, taking on the last name Losinger.
Rolison, however, never updated his beneficiary designation on his retirement plan. In 2015, Rolison passed away at age 59, single and childless, with no will and no guidance on who should inherit his assets. His retirement account, which had grown to $1.15 million, was still designated to Losinger, nee Sjostedt.
Rolison’s brothers, Brian and Richard, were shocked when they learned that Losinger was the beneficiary of Rolison’s retirement account. They believed their brother wouldn’t have intended for his long-ago ex-girlfriend to receive his retirement savings. The brothers filed a lawsuit against P&G and Losinger in 2017, trying to get the money directed to Rolison’s estate.
On April 29, 2024, an appeals court issued an order, ruling that Losinger was entitled to the money. After fighting for four years, Rolison’s family lost their claim, the million dollars in Rolison’s retirement account, and all the legal fees and court costs invested in the fight. Because we have no doubt you wouldn’t want this to happen to your family, read on.
Why Even “Simple Estates” Require Trusted Guidance
Before we go on, I’ll clarify estate planning, how beneficiary accounts factor in, and why you likely need the guidance of a trusted advisor, even if you think you don’t have an estate, your estate is “simple,” or you don’t really need an estate plan. Even if you don’t consider yourself wealthy or think your estate is straightforward, you still need an estate plan to ensure your assets are distributed according to your wishes.
What estate planning is. Many people consider estate planning something only needed by the wealthy or the elderly. As you can see from this case, that’s just not true. Rolison wasn’t rich when he named Losinger as the beneficiary of his retirement account. And he probably wasn’t wealthy when they broke up. Nevertheless, not having an estate plan or the trusted guidance he would have needed to know what he needed, he made his ex-girlfriend a wealthy woman and cost his siblings a lot of time and money in the process.
At the most basic level, estate planning is about ensuring all of your assets pass to the people you want in the way you want, with the proper guidance and support to ensure that happens with the least effort, cost, and mess possible. It’s also about ensuring that if you become incapacitated, your wishes are known, honored, and able to be followed with the least cost and the most privacy possible.
Most importantly, estate planning is about your choices and your freedom. So, how important is it to you that you have a say in what happens to you, your hard-earned assets, and your loved ones when the time comes? If it’s important, you need an estate plan. It’s truly as simple as that. Otherwise, the government gets to decide on your behalf. When you create an estate plan, your wishes override the government’s plan for you and your loved ones.
How Beneficiary-Designated Accounts Factor Into Your Estate Plan
Beneficiary-designated accounts—like retirement accounts or life insurance—are part of your estate plan. Beneficiary designations override the government’s plan for you and, if you created one, whatever you might have written in your will or trust.
From the case I shared here, we learn that Rolison did not have a will, but it would not have made a difference even if he had. Beneficiary designations come before any will or trust, even if you made the designations years ago.
Beneficiary forms are powerful documents. They determine who gets your retirement accounts, life insurance policies, and bank accounts, often taking precedence over your will. If you filled out a beneficiary form years ago and still need to update it, the person named on it will likely receive the assets, regardless of your current wishes. So, the biggest takeaway from the Rolison/Losinger story is that beneficiary accounts are an integral part of your estate plan and should be reviewed regularly. This is why we include a review of your accounts, beneficiary designations, and an inventory of your assets – plus, we have to update programs for ongoing review – in all of our Life & Legacy Plans.
Why You Need Regular Reviews of Your Accounts and Beneficiary Designations
Rolison’s case highlights that it’s easy to forget about your beneficiary designations, especially if they were filled out years ago. However, the case also tells us that neglecting to update your accounts can lead to unintended consequences and legal battles for your loved ones. Regular reviews of your accounts and beneficiary designations can prevent such situations, making you feel proactive and in control of your financial future.
In Rolison’s case, his brothers argued that P&G failed to inform him about his beneficiary designation adequately. They claimed the company provided insufficient warnings when it changed service providers and in its monthly statements. However, most companies do not remind you to review and update your beneficiary accounts. When was the last time your bank reminded you to review the beneficiary designations on your checking account (if ever)? What about your life insurance company? And if not, have you taken it upon yourself to check your beneficiary designations regularly? Your life is busy enough. Is this a priority?
If not, it should be. In its decision, the court stated that it ruled in favor of P&G and Losinger because the individual is responsible for keeping beneficiary information current.
How Accountability Makes All the Difference
Your life is busy. Sometimes, making it through the day with all your responsibilities can be challenging. Probably the last thing on your mind is planning for your death and incapacity. The second-to-last thing is reviewing and updating your beneficiary accounts. You’re probably thinking you can do it later.
But the truth is this: “later” could be tomorrow. We all know we will die; we just don’t know when. Death doesn’t care about your age or how busy you are. I’m not saying this to scare you. It’s a fact, and I want you to be prepared so that what happened to the Rolison family won’t happen to yours. Death doesn’t have to be scary. When you plan for it, you’ll find that you can live your life with more purpose and peace of mind, knowing you’ve done the right thing for your loved ones.
If this sounds good, know that having a trusted advisor who is there for you throughout your lifetime can make all the difference. That’s why my Life & Legacy PlanningⓇ process includes regular check-ins and reviews of your plan, including your beneficiary accounts. The best part is you never have to think about it alone! Unlike most lawyers who do estate planning, I will remind you regularly to update your plan – and keep you accountable. I’ll also be there for you as life changes so your plan reflects your current wishes. Together, we’ll ensure your family inherits your accounts, not an ex-girlfriend you dated 40 years ago.
We Do the Heavy Lifting, So You Don’t Have To
When it comes to planning for your death and incapacity, we do the heavy lifting for you, freeing you to concentrate on your responsibilities to your family, your work, and yourself. We help you create a Life & Legacy Plan so that your loved ones stay out of court and conflict and that your plan works when needed. Once you’ve made your plan, you can rest easy knowing your wishes will be honored, your loved ones cared for, your property protected, and your plan updated throughout your lifetime.
If you’ve already created your Life & Legacy Plan with us, keep an eye out for our reminders to review and update it. If you know that you need to update your plan due to a life change, don’t hesitate to call us immediately.
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This article is a service of Oak Tree Law Firm, a Personal Family Lawyer® Firm. We don’t just draft documents; we ensure you make informed and empowered decisions about life and death, for yourself and the people you love. That’s why we offer a Life & Legacy Planning™ Session, during which you will get more financially organized than you’ve ever been before and make all the best choices for the people you love.
The content is sourced from Personal Family Lawyer® for use by Personal Family Lawyer® firms, a source believed to be providing accurate information. This material was created for educational and informational purposes only and is not intended as ERISA, tax, legal, or investment advice. If you are seeking legal advice specific to your needs, such advice services must be obtained on your own separate from this educational material.
